relaxation of Central Provident Fund (CPF) rules to allow the use of CPF savings for housing finance has contributed to over‐consumption of housing in Singapore Essay

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The relaxation of Central Provident Fund (CPF) rules to allow the use of CPF savings for housing finance has contributed to the over-consumption of housing in Singapore to a certain extent. This is because there are other factors such as a large increase in the influx of foreign immigration into Singapore as well as an improvement in the standard of living due to rising nominal wages and level of education which resulted in the over-consumption of Singapore housing.

As a result of globalisation, cosmopolitan Singapore has seen an increase in the influx of foreigners making Singapore their new homeland by taking up permanent residency or citizenship. In 2008, of the 4.8 million people currently residing in Singapore, about 478,000 are Permanent Residents (PR) 1. This is a huge increase from the 290,118 2 permanent residents in 2000. Such trend is not expected to decline as about 60,000 foreigners are granted PR status each year 1. This might result in an increase in the consumption of housing in Singapore when these PRs marry Singaporeans and hence are eligible to buy HDB flats with their Singaporean partners.

Furthermore, Singapore strong economic growth has increased the standard of living among Singaporeans. The level of education saw a sharp improvement over the years following the government heavy emphasis on educating its people. This resulted in Singaporean workers commanding higher wages when they take up more sophisticated, high skilled jobs and thus enabling them to afford more expensive houses. Financial-savvy Singaporeans are also attracted by the high rental yields offered by investment properties and thus are using their CPF savings for such investment purposes. All these could have fueled the over-consumption of housing in Singapore.

Nevertheless, the government has put into place several policies to prevent Singaporeans from speculating in property using CPF savings. For instance, there is a minimum occupation period of at least one year for...

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relaxation of Central Provident Fund (CPF) rules to allow the use of CPF savings for housing finance has contributed to over‐consumption of housing in Singapore. Anti Essays. Retrieved March 19, 2018, from the World Wide Web: http://www.antiessays.com/free-essays/Relaxation-Of-Central-Provident-Fund-Cpf-43415.html